Micro-hoo-book! has potential. But the (unlikely) combo reeks of disaster.

Micro-hoo!-book

Tech rumors are always fun to follow. Today’s tech rumor is that Microsoft will buy Yahoo!’s search business and ALL of Facebook. And as you may have guessed, there has been nonstop chatter on the subject.

  • Robert Scoble really got the ball rolling when he started theorizing on the synergies of such a deal, primarily that Facebook’s information would help lead to more relevant searches. Also, Google would have no access to all of this information, putting Microsoft at the advantage.
  • A lot of people think Scoble’s theory is a bit out of whack. Nick O’Neil of the social times and Erick Schonfeld of TechCrunch are critical of Scoble. Schonfeld makes solid arguments as to why Scoble’s theory could be done without buying a piece of Yahoo! or Facebook. But I think Erick’s missing some of the other synergies of Micro-hoo-book!, such as the ability to better target advertising on Facebook (and thus up revenue) with integrated search data.
  • ReadWriteWeb frames the showdown: Microsoft/Facebook (plus a hearty side of Yahoo!) vs. Google. Or, in my opinion, Microsoft + shiny new weapons vs. Google

Why Micro-hoo-book! has potential

Short version: Synergies

Long version:

  • Better search: Searches can become even more relevant as social data helps target our results towards our likes and preferences
  • Better advertising: With Google’s Adsense, you visit a website and the content of that page creates the relevant advertising. Now imagine Microsoft advertising on a site (or in its search results) with Facebook’s data on you. Facebook weeds out dislikes and will make the advertising more relevant by catering to your routines and your preferences.
  • Better advertising on Facebook: Search data from previous searches on Microsoft improve the relevancy of ads on Facebook. Plus smarter ads that work on better algorithms
  • Facebook integration with other Microsoft services: Better email, search the web from Facebook, IE web browsing integration with Facebook, etc.
  • New customer segment from Yahoo!: Increases Microsoft’s market share, can integrate Facebook features with Yahoo! search as well

Why Micro-hoo-book! seems unlikely to occur

Short version: Facebook

Long version: I seriously just don’t see Zuckerberg and the Facebook team selling Facebook just yet. I also don’t see them selling the rights to one of the key components, their data, over to Microsoft without a hefty price or something substantial just yet. Yahoo! will probably sell the search business and part of its brand. Microsoft, though it won’t gain any great tech this way, it will gain brand and new customers. Facebook, though, is still growing, they still have aspirations of an IPO, they still want to be independent. Unless Facebook believes its business is hitting a ceiling or going south, I just don’t think Facebook will (or should) sell.

Why Micro-hoo-book! reeks of disaster

Short Version: A slow and uninnovative behemoth that closes off its data and creates an odd competition between Microsoft and Google that will distract both companies from making new innovations and serving customers.

Long Version: See the short version. This week’s going to be interesting.

– Ben